Chancellor takes second stab at CBILS<\/p>\n<\/p>\n
Announcing the revamped business interruption loan scheme this morning, the government said more than \u00a390m in loans had approved for just fewer than 1,000 small businesses under the initiative. The number sounds impressive, but less so against a backdrop of 130,000 enquiries about the scheme from firms across the UK.\u00a0<\/p>\n
As documented earlier this week, the Treasury\u2019s failure to place restrictions on interest rates, meant banks were offering\u00a0CBILS loans with interest rates of up to 30% and demanding personal guarantees from small businesses before they would lend.<\/p>\n
Responding to criticism of how the big banks were applying the scheme, Chancellor Rishi Sunak announced the following amendments<\/a> this morning (3 April):<\/p>\n According to the Chancellor, the government \u201clistened to the concerns of some larger businesses affected by COVID-19 and [will] continue to work with the financial services sector to ensure that the \u00a3330bn of government support, through loans and guarantees, reaches as many businesses in need as possible.\u201d<\/p>\n The Chancellor is expected to speak with bank chief executives<\/a> next week to review the scheme and \u2018ensure everybody is playing their part\u201d.<\/p>\n This morning\u2019s announcement revealed that the Bank of England has promised to add another \u00a31.6m in support to large firms on top of the nearly \u00a31.9bn already provided.\u00a0\u00a0<\/p>\n Large businesses of between \u00a345m and\u00a0\u00a3500m turnover will be considered for loans of up to \u00a325m which will also be covered by an 80% government guarantee. CLBILS will also be offered at commercial rates of interest with further details to be announced by the government later this month.\u00a0<\/p>\n For loans over \u00a3250,000, personal guarantees will be limited to just 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets. Lenders were already prohibited from asking business owners to put their house on the line, but in response to numerous reports that this had not been followed, the Chancellor clarified that borrowers would not have to put their houses on the block as part of their personal guarantees.\u00a0<\/p>\n The Chancellor\u2019s guidance added that number of official CBILS lenders<\/a> will be extended to help speed up supply of the loans.\u00a0<\/p>\n Digital banks such as Tide and Starling are not yet included in the British Business Bank\u2019s list of approved providers<\/a> and have pointing out that the government is still not doing enough to make sure crucial financial support is reaching businesses where it is needed most.<\/p>\n\n
Coronavirus Large Business Interruption Loan Scheme<\/strong><\/h3>\n
Fintechs ready to help<\/strong><\/h3>\n